“Forms, Etc.”, a periodic newsletter of the Tennessee Assn. of REALTORS
Posted by: Buzz Steele, Director of Marketing & Research


CONTENTS
1. What Forms are mandatory in Tennessee?
2. Whatever happened to “Seller warrants…” in the Purchase and Sale Agreement?
3. How does the Closing company know the amount to pay licensees when the Compensation is not addressed in the Purchase and Sale Agreement?
4.
NEW UPDATE – Placing company LOGOS on TAR forms when using TransactionDesk
5. The Residential Forms Committee Needs Your Help
6. Got Broadband?


1. What Forms are mandatory in Tennessee?

The short and simple answer is that there are NO STATE MANDATED forms with the  exception of the “Residential Property Condition Dislcosure” form and  the “Commercial/Industrial Real Property Disclsoure” form (respectively TAR forms F16 and F51). And even so, the Commercial/Industrial Real Property Disclosure is subject to some very strict limitations:

At the request of a prospective tenant, the owner of commercial or industrial real property where the commercial property space is one thousand five hundred square feet (1,500 sq. ft.) or less, and the industrial real property is five thousand square feet (5,000 sq. ft.) or less, shall furnish to such prospective tenant a signed disclosure statement detailing the extent to which such real property is understood by the owner to be in compliance with local and state fire, plumbing, and electrical codes for a building of the type under construction.

In addition, there are FEDERAL FORMS that are required such as the “Lead Based Paint Disclosures” pamphlets, etc.

HOWEVER–
While there may not be state mandated forms, THERE IS REQUIRED LANGUAGE and REQUIRED DISCLOSURES that are mandated by the state of Tennessee.

TAR forms are provided for the convenience of its members to make sure members are in compliance with the required language and disclosures.  It is NOT required that the membership use the TAR forms, but they are available for use and your convenience.  An advantage to using the TAR forms is that these forms are reviewed every year by an attorney to ensure that they are in compliance with any changes that have been made in state law or in TREC Rules. In addition, COMPANIES are eligible for a 5% Company E&O Insurance discount by adopting and using the TAR standard forms through Rice Insurance – the state’s preferred provider.

As you know, there have been many changes over the last several years in both state law and in TREC Rules and the TAR Forms incorporate all of these changes.  You can download the detailed WHITE PAPER (below) as an aid in making suggestions as to the forms available which incorporate any and all required disclosures and/or required language in a typical real estate transaction. This “white paper”  supplied by TAR’s counsel will help you determine the suggested TAR Forms that you should be using to be in compliance with required language and required disclosures. If you elect to use your own forms, this paper is also useful in providing a compliance outline.

Download the WHITE PAPER.


2. What ever happened to the “Seller warrants…” OR “Condition of Premises” language in the Purchase and Sale Agreement?

For a few years now the Purchase and Sales Agreement (PSA) no longer contains language  the “Seller warrants..” as to the condition of property, some companies are adding an addendum or verbiage in the special stipulations area that puts this “old” language back in the form.

Here’s some history for your understanding as to why this language no longer exists and a word of caution.

The word warrant is definitely a problem since Sellers aren’t professionals or experts in HVAC, Plumbing, Electrical services, etc.

Also, the TAR Residential Forms committee provides for a FINAL INSPECTION in which the Buyer has the opportunity to reinspect everything prior to closing.

See Lines 183 – 184 of the PSA:
Seller shall cause all utility services and any pool, spa, and similar items to be operational so that Buyer may complete all inspections and tests under this Agreement. 

The TN Property Condition Disclosure, if used properly, would be more than sufficient to calm the anxiety over what is included and whether or not the Seller will own up to the condition of the property.

One cannot legislate morality and whether a Seller signs either document dishonestly is not under one’s control. By educating agents to have sellers fill out the disclosure at the time of listing and having selling agents insist on a copy so that the buyers will have this information when the offer is written is highly recommended when training agents.

In addition, a couple points of caution –  

#1
Adding an addendum or special stipulation verbiage with the “old language” may eliminate much of the protection built into the inspection section of the PSA.
#2
Adding the old language via addendum or special stipulation makes a neutral PSA lop-sided in favor of the Buyer.  Do you really want your Seller to warrant if it is your listing?


3. How does the Closing company know the amount to pay licensees when the Compensation is not addressed in the Purchase and Sale Agreement?

Take a look at TAR form F56 – Compensation Agreement Between Listing & Seller Broker. This form is also referred to as the “Cooperative Agreement”.

It is used so your firm will have an agreement in writing concerning the cooperating commission to be paid by the listing firm. Most MLS Rules and regulations require cooperating compensation for entry into the MLS, however this form will be the actual agreement between the selling firm and the listing firm.

This form has language that will protect all involved parties. It is recommended this form be completed when you are showing property. If you have this agreement in place before you show property, then there are no questions concerning the division of cooperating commissions or cutting commissions to make transactions work.

This form would also provide the listing licensee and the selling licensee documentation in case a Carry Over Period is utilized in a listing agreement.

SUGGESTED TIP:
Why not fill this out when you list a property and upload to your MLS system (if available) with your disclosure documents. hTe Buyer’s Representative can print it off and submit it as an executed agreement with their offer!  Save some time!

HOW DOES EACH PARTY GET PAID – GENERAL PRACTICE AT CLOSING:

When it comes to the actual closing and and the checks that are being cut to the Listing Broker and Selling Broker, the closing company needs to see this form (F56) to determine the compensation that is to be paid to the Selling Broker.

In addition, the closing company would also need to see the ACTUAL “Listing Agreement” to determine the compensation that is to be paid to the Listing Broker. (Seller to Listing Broker).

The listing agreement should not be shared with the buyer’s agent without the written consent of the seller.

..:: SOURCE of INFORMATION – TAR inFORM Tool ::..


4. NEW UPDATE – Placing company LOGOS on TAR forms when using TransactionDesk

The field size for the LOGO placement on TAR forms just got BIGGER!!!

Instead of a small square logo, you can now place banner size logos on all of the TAR forms. If you would like to replace your small logo or add a new logo to the TAR forms when using TransactionDesk, you will need to follow the standard requirements:

800 X 125 pixels (dimension size)
JPG, GIF, and PNG graphic formats ONLY

When Advertising for FRANCHISE or COOPERATIVE ADVERTISING GROUPS only, refer to TCA 1260-2-.12 Section (4)(c):
Any licensee using a trade name on business cards, contracts, or other documents relating to real estate transactions shall clearly and unmistakably indicate thereon:
1. his name and firm telephone number (as registered with the Commission) and:
2. the fact that his office is independently owned and operated.

How to update or place new logos on your forms:
1) Send an email to
2) Make sure you attach the logo and in the body of the email identify yourself by First and Last Name and your NRDS ID# and the name of your firm.

Note: All advertising, regardless of its nature and the medium in which it appears, which promotes the sale or lease of real property, shall conform to the requirements of TREC rules. Please review those rules before applying your company logo to the forms.   


5. The Residential Forms Committee Needs Your Help

In an effort to make the TAR forms inventory better for member use, the TAR Residential Forms Committee humbly asks for your help in filling out a survey. This survey is designed to help the committee collect information for purposes of guiding its decision making processes.

Click on the link below:
Forms Survey


6. Got Broadband?

Did you know that over 67% of the TAR membership does not have access to DSL? Current times almost necessitates the use of broadband connection for business purposes.

Good News! One of TAR’s discount service providers, HughesNet, can supply broadband  internet access where Cable and DSL  are not offered. HughesNet brings you high-speed access via satellite. Granted, it’s a more expensive but if you need high-speed access, you now have an option that is available.

Hughes Announces Fastest Consumer Satellite Internet Access Plan Ever Offered

Germanton, MD., August 6, 2008 — Hughes Network Systems, LLC, (HUGHES), the world’s leading provider of broadband satellite networks and services, today announced the launch of the fastest consumer broadband satellite Internet access plan ever offered. The ElitePremium plan, operating over the HughesNet® service and utilizing affordable consumer equipment, features download speeds of up to 5 Mbp.

For more information, visit TAR’s web site [ CLICK HERE ]